Making smart decisions in IT outsourcing


IT outsourcingA recent survey from Asset International's CIO magazine discussed the many driving forces behind business leader decisions to outsource tech-related duties, including the desire to increase efficiency and growth potential. In light of budget slashes and potential layoffs, many companies have been adapting to uncertain market conditions over the past few years with greater reliance on IT services providers.

CIOs in major companies do not want to see their departments depleted any further, but understand they cannot support innovative moves when working with limited resources. Thus, many are encouraging the use of outsourced IT services, managed IT services, and IT staffing solutions to meet short- and long-term demands and better weather the current economic climate.

The survey outlined the common scenario for a company to consider IT outsourcing, a formula seen in most industries across the world. The average company looking to expand its IT capabilities through a third-party partnership have 4.7 in-house IT staff members, demonstrating companies with smaller demands can benefit greatly from outsourcing duties. In fact, a lack of internal resources is the top reason for 46 percent of all outsourcing plans, followed by lower costs, strategic partnerships and faster implementation of new solutions.

Furthermore, companies opting to outsource specific projects or tasks, rather than all management roles, are also reporting high returns on investment after similar factors increased demand for IT expertise. About 67 percent of businesses that outsourced individual services to third-party providers enjoyed maintaining some control over IT operations, and 66 percent wanted to maintain a connection between third-party providers and decision-makers with an in-house presence. Many companies choose to work with IT service providers on specific projects, learning from the experts, and then translate these lessons into other IT functions in future projects.

Making the change 
Many companies are unable to house fully staffed IT departments, and wish to spend their capital and manpower on other sectors or projects within the enterprise. As a result, businesses are investing more in IT service outsourcing and expert guidance to take full advantage of on-demand resources without incurring long-term costs.

When working with an IT services provider, business leaders have a wide array of offerings to choose from. The services can include managed IT services (such as EDI outsourcing and B2B managed services), IT audits, technology assessments, CIO outsourcing, IT budget management, policy development and process consultations. While a smaller business may feel its limited IT demands are not significant enough to require expert guidance, it would be wrong. Companies of all sizes can benefit from customizable IT service offerings to get more productivity out of each technology adoption, driving high return on investment and increased growth potential.

Why outsource?
Companies have several options when considering outsourcing IT requirements to third-party providers. Some businesses choose to outsource key functions to experts such as IBM or Oxford Consulting Group, while others will hire the pros for more specific services or projects such as EDI mapping, B2B integration solution upgrades, application development, database management and others.  In opting to outsource IT tasks, businesses can enjoy lower costs, variable capacity, freed up capital and manpower for other projects, increased efficiency and greater access to expert resources and guidance.

Companies that hire on-demand IT services from outsourced companies are more flexible and adaptive to market demands and can make changes to combat temporary or permanent fluctuations. Understanding how much the IT services will cost up front - and knowing the costs will not be exceeded - will help business leaders gain tighter control over budgets and expenditures. Furthermore, not having to purchase and maintain extensive IT infrastructure to support technology departments will also keep costs low. Despite expenses decreasing, partnerships with IT experts will provide access to innovative, cutting-edge leadership from individuals who are well-versed in tech-related strategies.